China Restaurant Industry Remains A Huge Growth Opportunity

KFC’s parent company, Yum! Brands, announced on March 25 it would buy 20 percent of the Little Sheep Group, China’s leading hotpot chain restaurant based in Baotou City, Inner Mongolia.

Yum! Brand has 2,300 KFC and 400 Pizza Hut stores in China so far, while Little Sheep was operating 375 restaurants in mainland China, Hong Kong, the US and Japan at the end of last year, according to London-based research company Euromonitor International.

On the contrary, soft drink giant Coca-Cola was not lucky. Its take-over bid for China’s top pure juice maker, Huiyuan Group, was rejected by the Chinese central government days ago under the country’s anti-monopoly law which took effect last August.

Shares of Little Sheep traded at the Hong Kong Stock Exchange gained 13.7 percent to HK $2.98(US $0.38) on the same day.

The HK $493 million (US$63.6 million) deal is expected to be finalized in this summer. Sam Su, Yum! Brand China’s president, said China remains the biggest growth opportunity in the restaurant industry in the 21st century.